5 Things Potential Franchisees Need to Prove
There are specific qualities that franchisors look for when they review the applications of potential franchisees. Franchisors more than likely will not invest in someone who may be considered to be high risk. Instead they favor applicants who exhibit characteristics that suggest an ability to manage a business and adapt to their environment to ensure profitability.
If you don't have an entrepreneurial background, do not fear, as most franchisors are well aware that applicants may not have direct experience in running their own business.
The following are five areas that potential franchisees should be prepared to address to land their franchise of choice:
1. Financial Situation – This is important in determining the applicant’s stability and ability to have a cushion if the business hits a rough patch. Franchisors will consider their applicant’s net worth and any additional sources of income. The net worth will include assets, such as cash, real estate, savings, stocks, bonds, and so on. Franchisors are also concerned with potential liabilities. For example, does the applicant have any outstanding student loans or other debts that could pose a problem?
2. Educational History – Franchisors are interested in the educational background of their applicants. Although a college degree may not be critical to running a franchise, applicants who have invested in their educational development may be viewed as more disciplined and reliable.
3. Previous Employment – Franchisors are always interested in their applicants’ experience and its applicability to franchising. Expect to send in a resume as well as professional and/or personal references.
4. Motivation for Buying – Franchisors want their applicants to show enthusiasm. Hopefuls are expected to sell themselves, to prove why they are a great fit for the franchise's business model. Applicants must make sure to highlight aspects of their personal and professional history that illustrate their strong candidacy. This is why it is important for applicants to do their own research up front to determine the type of franchise they would be best suited to operate.
If a prospective franchisee can effectively filter down the thousands of available franchise opportunities to just those few that best match his or her financial situation, skills, experience, and personality, the candidate's enthusiasm for those perfectly matched franchise opportunities can help convince otherwise skeptical franchise development directors that the candidate could be the franchise system's next great franchisee.
5. Demonstrate a clear understanding of responsibilities - Franchisors are looking for candidates who have realistic expectations and are aware of the requirements and intricacies of working under a given franchise brand. Again, this is why we at FranchiseHelp advise prospective franchisees to conduct their research first and submit their applications second.
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Why Should I Open a Franchise Rather Than Open My Own Business?
America has always been the land of free enterprise, and the prospect of self- employment may sound like a dream come true. Imagine the schedule flexibility, the freedom to explore and expand while pursuing an interesting career. The alleyways of entrepreneurship are so vast that it can be rather daunting to entertain. What is the right business for today? What product is in demand? Which business model is most profitable? What concept is most likely to succeed? Potential owners also must consider that franchising may be a better option than small business start ups. Yes, when entrepreneurship meets franchising, the parameters change. There may still be freedom, but new franchisees find themselves absorbed into a preset business model with a tried and true support system.